Weather, sell-off sinks wheat futures

U.S. wheat futures are lower Monday morning on broad selling in commodity markets and a mixed weather forecast for crops.

In electronic trading, Chicago Board of Trade futures for May delivery are down 17 1/2 cents, or 2.4%, at $6.97 1/4 a bushel. Kansas City Board of Trade May wheat is down 16 cents, or 2.1%, at $7.37 a bushel. MGEX May wheat is down 10 3/4 cents, or 1.3%, at $7.97 a bushel.

Wheat is down along with other commodities in a selloff after disappointing economic data from China. Besides grain and oilseed markets, prices are also down for crude oil and metals.

Gross domestic product in China in the first quarter grew 7.7% compared with a year earlier. Growth was slower than in the fourth quarter and below economists' expectations of 8%, sparking worries that China could slow its commodity imports.

Wheat futures are also down on a mixed weather forecast for U.S. wheat crops. Heavy rainfall in the Midwest could benefit winter wheat crops growing in the region, and substantial precipitation in the southeastern Plains could benefit crops as well. The eastern half of Kansas in the next five days will receive from a half-inch to as much as two inches of precipitation, according to a forecast by the National Weather Service.

But little precipitation will come to the area from southwestern Kansas to the Texas panhandle, a key part of the wheat belt that has also missed out on other recent storms.

Forecasts also show a risk of freeze damage to crops in part of the Plains on Thursday morning this week, after likely damage from cold temperatures last week.

Wheat traders will watch for the U.S. Department of Agriculture to issue its weekly crop-progress report Monday after the market closes. The report will include updated crop condition ratings for wheat, which traders hope will show how much damage was done to crops last week.

The USDA on Monday said private exporters reported selling 480,000 metric tons of soft red winter wheat to China for delivery in the next marketing year, which will begin June 1. The announcement comes after the USDA on Thursday reported a similar sale of 360,000 tons.

The large export sale didn't boost prices because it was expected. A state-backed Chinese think tank had already reported a buyer purchasing a large amount of wheat from the U.S.